Comparison study of buying an airplane, fractional share, jet cardrivate jet charter

26. Page 4-4

background image

4. Key Attributes 




Private Jet Travel: Understanding the Options  

October 2003 



Complexity encompasses the degree of time, money and other resources 
required to engage the services of a business aviation program.  With some 
offerings you would be wise to have either a high industry competence level or 
retain the services of advisors to assist you with the transaction. 
Charter. Charter is the least complex option.  While a little more complex than 
buying a commercial airline ticket, your “reservation” process should be painless 
and simple.  
Block Charter. Block Charter requires you to enter into a more complex contract, 
outlining the program’s fees and services.  It is usually, however, one document 
and is relatively straightforward. 
Fractional. Fractional programs require you to execute fairly complex 
agreements. You should consider tax implications (depreciation, passive loss 
rules, state sales and use tax) any time you own an interest in an aircraft, such 
as in Fractional.  You might need to consider accounting (e.g., balance sheet) 
and disclosure requirements.  And you should consider strategies for limiting 
liability associated with the ownership and operation of aircraft. 
Block-Frax. Block-Frax programs require that you enter into a set of agreements 
that are derivative of Fractional and as such, fairly complicated.  But you do not 
own the asset and therefore the complexity level is reduced compared to 
programs where you do obtain title. 
Ownership. Acquiring a turbine aircraft is a sizeable business transaction.  
Selection requires thorough analysis and expertise. The acquisition and 
financing/lease transactions themselves can be fairly complex. Ownership 
implies the need to consider tax, accounting and liability matters and perhaps 
disclosure requirements. As operator, you will have to comply with aviation 
regulations, and you might choose to establish an internal flight department or 
contract for those services with a third party (the latter being a fairly 
straightforward proposition). 
For some, access to a consistent air travel experience is a major consideration in 
their move to business aviation.  Consistency can be measured in terms of 
access to the same or virtually identical aircraft or crew/ground support staff that 
over time become familiar with your needs.  Further, the ability to “personalize” 
an aircraft to reflect one’s own tastes or to portray a certain image is important for 
some business aviation users.  This customization could include paint scheme, 
interior configuration, and onboard items with custom logos. Consistency also 
encompasses operational consistency – setting and sticking to strict standards 
for pilot selection and crew training, maintenance, flight planning, dispatch and 
scheduling.  The most critical aspect of consistency, though, is probably the 
degree to which the quality of the overall product delivery is met flight after flight.  



Charter is very 


Block Charter has 
a simple contract




Fractional and 
Block-Frax are 
more complex 




Ownership is 





Service and 





"Chartering a plane, either directly from a charter company or through a charter broker, is often the most cost effective way to fly private."

Independent Source: Deloitte Private Wealth, Private aircraft: Flying private makes sense for those with the right information (page 20)
*This website has no affiliation with Deloitte.